BHP Billiton
chairman
Jac Nasser
has moved faster than expected to resolve the leadership uncertainty hanging over the global mining giant with the appointment of Scottish-born geologist Andrew Mackenzie as its new chief executive.

The decision is prudent. It puts to rest the rampant speculation about outgoing chief Marius Kloppers’s future at the company, something that needed to be resolved sooner rather than later.

It also reflects a conservative new era in the global mining industry where cost cutting is king and big acquisitions are off the table.

Nasser always favoured an internal candidate for the job but also needed to take some time to benchmark his options against outside alternatives. The decision has come earlier than many expected, highlighting the pressure the miner was under to clear the air.

Kloppers’s decision to stay on board and advise Mackenzie through the leadership change also ensures a smooth transition. The long-serving chief appears to be leaving on good terms.

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The praise he heaped on Mackenzie at a Sydney press conference this morning was charged with emotion, more reflective of an Oscar’s acceptance speech than a corporate leadership change.

“I consider you [Mackenzie] in a very real sense, not just in theory but in practice, the guy I will go to if I am asking advice for my kids and I will listen to that advice," Kloppers said of the man he recruited to the company in 2008. “He is a great friend, he is a great leader and he will take the organisation onto great things."

Kloppers is handling his departure, a decision made after consulting his family as well as the board, was aplomb. BHP clearly want to project the message there are no sour grapes and the incoming and outgoing chiefs will work well together to ensure a smooth handover.

Kloppers has been on borrowed time since a British newspaper leaked news last year that a recruitment firm was looking for a successor. Mackenzie was one of four internal candidates touted for the job although he was not seen by many as the front-runner.

Like the other candidates, including ferrous and coal boss Macus Randolph, he has the operational experience badly needed to lead the company at a time when the desire for rapid growth has been replaced by a new conservatism which is focused on improving productivity and improving shareholder returns.

The former scientist, who grew up in a coalmining town near Glasgow and has chaired the British Labour government’s think tank Demos, has deep experience in oil and gas, petrochemicals and minerals.

Mackenzie’s background is in the chemicals industry which never enjoyed the margins that the resources sector has. That should hold him in good stead to lead the company in a period where margins are being squeezed.

He talked a lot this morning about productivity a shareholder returns. The message was not dissimilar from Rio Tinto whose executives have been making it clear to investors in briefings this week that shareholder interests are paramount.

Cultural change under Mackenzie’s leadership is more likely than any major shift in strategy.